Sun Jun 27th, 2010 at 05:04:12 AM EST
With the European drive towards austerity gaining momentum, Krugman and many others are writing the Continent off as heading towards a lost decade (or worse) and of imperilling the world economy. That may be true. However, I believe austerity may work.
I should note, however, is that while austerity may work, there is no guarantee it will. I do not assume that our esteemed leaders know why it might work - quite the contrary, as a matter of fact. And if austerity does work, it certainly won't work for the stated reasons. In fact, if it does work it'll do so on purely keynesian principles, as an accidental result of our leaders' bumbling. And even if it works the periphery has little to look forward to.
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